The value of diversification

We woke up to a profit warning from ASOS and knew that it wouldn’t take long for the share price to react. It is currently down circa 40%.

We wanted to take this opportunity to remind you of the importance of diversification and the impact this can have on risk mitigation.

Our Stellar ESP AiM Portfolio Service is one of the most diversified on the market and holds 40 AiM quoted companies to reduce concentration risk and lower volatility.

This means that whilst our investors do hold ASOS, it constitutes only 2.1% of their portfolio. All other share prices being equal, the fall in ASOS will equate to a 0.8% fall in the total portfolio value.

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